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Australia: Victoria’s “Big Housing Build” a windfall for developers

The Victorian state Labor government’s budget last month allocated $5.3 billion for its “Big Housing Build,” the marketing brand name for its housing program. The spending, and claims that 12,000 new affordable homes will result, have been touted by the government of Premier Daniel Andrews as a major social reform initiative.

High-rise public housing apartment block in Flemington [Photo: WSWS]

In reality, however, the program will not resolve the issues of homelessness and unaffordable housing confronting millions of working people across the state. At best, the program will deliver a net increase of just 8,200 social housing units over four years. This represents just one-third of the minimum number required to make any inroads into Victoria’s housing crisis.

The current population of Victoria is 6.5 million and of those more than 100,000 are on housing waiting lists, that is, they are either homeless or in unsuitable and unaffordable housing.

“Social housing” is the umbrella term the government uses to categorise “public housing,” which is owned and administered by the government, and “community housing,” which is run by “not-for-profit” housing providers known as Community Housing Organisations (CHO).

The Big Housing Build will primarily fund community housing and private housing that will be sold for profit. In other words, far from contributing to a resolution of the housing crisis, the Labor government’s latest initiative will further run down the ageing and limited public housing stock now available.

The RMIT University Centre for Urban Research (CUR) published a paper titled “Does the Big Housing Build address the housing crisis in Victoria?”

The paper breaks down the project funding as follows:

  • $532 million to build new houses to replace public housing. The report details that 446 existing public housing units will be demolished on six sites around Melbourne, to be replaced with 500 community housing units and 500 private dwellings to be sold at market prices.
  • $948 million to buy already constructed housing or projects in planning from private developers. The CUR states, “This component of the Big Housing Build is thus a $948 million bailout to the private sector on failed, stalled or otherwise no longer viable developments.”
  • $1.38 billion to top up an existing fund that finances CHO projects.
  • $2.14 billion to fund partnerships with private developers and CHOs to build houses on government owned land.

Overall, only 6,000 of the 12,000 new homes to be constructed will be allocated to those languishing on the 100,000-strong public housing waiting list.

The remainder will be sold privately or will be managed by CHOs that can charge amounts higher than the 25 percent of income cap in rent mandated for public housing tenants. Additionally, CHO tenants have less security of tenure than provided to public housing residents.

One such development to be funded by the Big Housing Build is the Victoria Street/Holland Court public housing estate in Flemington, an inner Melbourne suburb. This estate was notoriously locked down in a military-style operation involving 500 police that terrified the 3,000 mostly impoverished and migrant residents during the height of the pandemic (see: “Oppose the Melbourne public housing towers lock-in! For a health and welfare response, not a police mobilisation!”).

In one section of the estate, 198 existing public housing units in low-rise blocks will be demolished to provide 200 new units, an unspecified number of which will be sold to private buyers. With the median house price in Flemington for a house currently over $1 million, profits will flow to property developers.

The largest component of the Big Housing Build fund is $2.14 billion for 5,200 new homes on government-owned land. That equates to $411,538 per home. The homes will be built by private developers and CHOs. Of the 5,200 new homes, an unspecified number will be sold privately. The government claims these will be “affordable” but even at 80 percent of market price such homes are still unaffordable to anyone on the waiting list.

The CUR paper explains that the same expenditure of $2.14 billion to build public housing at $300,000 each on public land could result in 7,100 public housing units that would offer affordable rents and long-term security of tenure. If the full amount of $5.3 billion for the Big Housing Build was used just for public housing, the Age newspaper estimated more than 20,000 units could be built.

The Big Housing Build continues the decades-long rundown of public housing and further privatises what is left. At the completion of the program, it is predicted only 3.5 percent of Victoria’s homes will be social housing, below the current Australian average of 4.2 percent (down from 7.1 percent in 1991) and well below the OECD average of 6 percent.

The Big Housing Build is essentially a government stimulus measure to prop up the construction sector.

Before the pandemic, the state government was preparing to impose austerity budget cuts to the tune of several billion dollars, aimed at maintaining the state’s budget surplus and triple A credit rating. The impact of the global pandemic and protracted lockdown of the state capital, Melbourne, has made that impossible.

The government is now pursuing stimulus measures aimed at staving off an economic depression. Taking advantage of historically low interest rates, the Labor government is pouring billions of dollars into infrastructure projects to keep the ailing economy afloat and to prop up the construction industry and banks that are reliant on it. Some $3 billion has been allocated to school buildings and $2.2 billion towards an outer suburban rail loop, among other projects.

All these projects, however, are centrally directed to advantaging sections of big business and finance capital. In housing, by continuing the process of cutting already low levels of public housing stock, the Andrews government will force more and more people into housing poverty and homelessness. This threat in turn forces people to pay a very large proportion of their income in rent or mortgage payments. The dwelling price-to-income ratio in Australia has more than doubled in the past 30 years.

Decent and secure housing is a basic social right, yet this cannot be met by a system based on the accumulation of corporate profit and personal wealth. Vast public resources ought to be allocated to the construction of tens of thousands of high-quality, public housing apartments and houses each year to provide every person with a decent, affordable home.

https://www.wsws.org/en/articles/2020/12/23/vbhb-d23.html

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NSW Minister Gareth Ward unveils 94-unit social and affordable housing development at Cardiff

A 94-unit social and affordable housing development has been unveiled at Cardiff by the NSW Minister for Families, Communities and Disability Services. 

Minister Gareth Ward officially opened the NSW government and St Vincent de Paul Housing-partnership project at a ceremony on Tuesday morning. 

The development, on Sturt Road adjacent to the Sydney-Newcastle train line, is the last project St Vincent de Paul Housing will deliver as part of its Social and Affordable Housing Fund contract with the government. 

It has now delivered more than 500 dwellings across the state, including in Maitland, Dubbo, Albury and Sydney. 

“Today marks an important milestone in the SAHF program with Vinnies surpassing 500 new homes delivered across NSW,” Mr Ward said on Tuesday. 

“This new 94-unit social and affordable housing complex in Cardiff is close to shops, transport and services, and will help reduce housing stress.

“People who move into these modern apartments will not only have a place to call home, but access to services and support to help them improve their health and general wellbeing.”

Single mum Chloe said she was ecstatic to have moved into the new units with her daughter Ciara and soon-to-be-born son. 

“With a young daughter and a son arriving any day, having safe and stable housing means the world to me,” she said. 

Vinnies was one of eight community housing providers that the NSW government partnered with to deliver new homes and tailored support services under the Social and Affordable Housing Fund program.

St Vincent de Paul Housing CEO Brian Murnane said the SAHF contract had employed hundreds of people in construction and administration, injected money into the economy and providing hundreds of new homes for vulnerable people.

“Because of projects like this, hundreds of families across NSW were able to celebrate Christmas in their new home and look to 2021 with renewed hope and optimism,” he said.

DELIVERED: Lake Macquarie MP Greg Piper, Gareth Ward, Ciara, Chloe and St Vincent de Paul Society NSW chief executive officer Jack De Groot.
 DELIVERED: Lake Macquarie MP Greg Piper, Gareth Ward, Ciara, Chloe and St Vincent de Paul Society NSW chief executive officer Jack De Groot.

“The delivery of modern affordable accommodation together with wrap-around support to vulnerable people in need of assistance like that delivered under the SAHF is a key mission of the Society.”

Mr Ward opened a similar 65-unit development at Thornton in November.

https://www.newcastleherald.com.au/story/7091508/cardiff-social-and-affordable-housing-development-unveiled/

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‘This will change lives’: $5.3 billion social-housing construction blitz

Victoria has the lowest proportion of social housing in Australia. Only 3.2 per cent of Victoria’s housing stock is social housing – about 81,000 dwellings – below the national average of 4.2 per cent.

 The package is expected to generate $6.7 billion in economic activity and will boost the state’s social housing supply by 10 per cent within four years.

Homelessness in Australia

More than 116,000 Australians are homeless, but only 7 percent of those people are rough sleepers.

It also includes 2900 affordable homes, to be let at below-market rates, built to help people on low- to moderate incomes live closer to where they work.

A quarter of the $5.3 billion will be allocated to regional Victoria, where there is high demand for priority access to social housing in areas such as Geelong, Bendigo and Ballarat.

“This will change lives – giving thousands of Victorians the security and stability of a home and tens of thousands of Victorians a job,” Premier Daniel Andrews said.

Bob Petersen, 74, was helped off the street into an affordable rental by not-for-profit Housing Trust thanks to NSW state funding during COVID.

Homelessness

Bob slept on trains. Now he has a home. The fix was simpler than you might think

The building industry has been urging the government to invest in social housing, with Master Builders Association of Victoria CEO Rebecca Casson saying almost 30,000 Victorian building and construction workers had lost their jobs since March.

Ten per cent of the work on the major housing projects will be done by apprentices, cadets and trainees and hundreds of jobs will be created for women, Aboriginal Victorians, people with a disability and social-housing tenants through social procurement targets.

In an interview with The Sunday Age, Housing Minister Richard Wynne said the government would work with social housing providers, the private sector and local government to deliver the housing.

“Without doubt this is the biggest commitment by any state government ever,” Mr Wynne said. “This makes a huge dent in the social housing waiting list.”

The first sites to be developed will be in West Heidelberg, Ascot Vale, Flemington, Hawthorn, Richmond and Ashburton.

Tenants of public housing are charged at no more than 25 per cent of their income and those in community housing, which is run by not-for-profit agencies, are charged no more than 30 per cent of their income.

Two thousand of the new social-housing homes will be allocated to people with mental illness, which accounts for a quarter of those on the priority waiting list.

Tenzin Laktso, who has post-traumatic stress disorder and cognitive depression, said public housing had made a huge difference to his life.

The 44-year-old has lived in public housing units since 2017. He spends 25 per cent of his disability pension on rent, which he says is manageable.

Tenzin Laktso says public housing has made a huge difference to his life.

“Accommodation is the foundation for everything, for wellbeing, for going out and looking for jobs,” Mr Laktso said.

A new government agency, Homes Victoria, has been established to deliver and manage public housing.

It will spend $948 million spot purchasing properties, as well as in-progress or ready to build projects, where social and affordable housing is urgently needed as well as building on vacant sites the government already owns.

 

Combined with new housing from existing investments such as the controversial Public Housing Renewal program and Social Housing Growth Fund, construction of more than 15,800 new homes will begin over the next four years.

 

The state opposition has called on the government to make a record investment in social housing in the budget.

The Greens, which called for 100,000 new public-housing homes over the next decade, welcomed the billions being spent.

However, Greens acting housing spokesman Sam Hibbins said the party did not want a repeat of the $185 million public-housing renewal program in which nine public housing estates were sold to developers to rebuild with a mix of private apartments and social housing.

Mr Wynne told The Sunday Age the program would be reassessed when the nine estates were completed.

“We want to see this activity happen as quickly as possible to get Victorians into work and into homes.”

Swinburne University professor of housing studies Terry Burke said the package was an important and welcome initiative.

“For the state to go it alone on this scale hasn’t been replicated anywhere in Australia,” he said.

Professor Burke said the challenge was where to build the housing. “The obvious place to put them to maximise dollars is the outer suburbs, but you really want to put them in the middle and inner suburbs where people have access to services, particularly health and employment opportunities.”

 

He said the government was also faced with the challenge of managing social housing as well as building it, especially when many tenants needed both shelter and support.

Victorian Council of Social Service CEO Emma King said the new social housing would change thousands of lives. “We already had a housing and homelessness crisis and COVID made it worse. This is such a massive help to solving the crisis while also helping the state move towards recovery.”

Victoria’s big housing build

Victoria’s $5.3 billion Big Housing Build will construct more than 12,000 homes across metropolitan and regional areas for social housing.

More than 9000 new homes will be built, including replacing 1100 old public housing units.

Almost 3000 more homes will be built to help people on low- to moderate incomes live closer to where they work.

$6.7 billion in economic activity is forecast, underwriting 10,000 jobs a year over the next four years.

‘This will change lives’

https://www.theage.com.au/national/victoria/this-will-change-lives-5-3-billion-social-housing-construction-blitz-20201114-p56em5.html